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Author Topic: Why aren't I filthy rich yet? It's been like two months.  (Read 10866 times)
Roger_Murdock
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June 20, 2012, 12:01:08 AM
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According to wikipedia, roughly 5.3 billion troy ounces of gold have been mined in all of human history.  Gold is currently trading at around $1600 a troy ounce which means that the total market value of all of the world's mined gold is approximately $8.5 trillion.  The demand for gold (and hence its price) is not driven entirely by its monetary usefulness because it has other uses such as jewelry and electronics.  But a non-trivial fraction of its price comes from its usefulness as money.  How big is that fraction? Let's be conservative and say it's only 25%.  That means that gold's total "money value" is around $2 trillion. Let's pretend as a simplifying assumption that all 21 million bitcoins have been mined.  The total value of those coins based on a current price of $6.40 is $134 million.  134 million is smaller than 2 trillion.  Bitcoin is supposedly a "better" money than gold when you evaluate it according to all the characteristics that make for good money, e.g., it's divisible, fungible, durable, portable, identifiable, and scarce.  And yet, (using all of the previous assumptions) if bitcoins were valued ONLY 1/1000th as much as "monetary" gold, they'd be worth a total of $2 billion, i.e. roughly $95 / BTC. If they were valued AS MUCH as monetary gold, they'd be worth $95,000 a piece. Of course, since bitcoins are at least 10 times BETTER than gold, they should really be worth no less than $950,000 each. And yet, I can't help but notice that I still live with my parents and drive an '89 Geo Metro. That raises a few questions:

1) Why aren't I filthy rich yet?
2) Any other dreamers willing to post their pie-in-the-sky, insanely bullish predictions for what a bitcoin could be worth in terms of purchasing power if it proves to be as revolutionary as we hope it will be?

AND

3) It seems like a lot of people are very focused on bitcoin's adoption by merchants, i.e. the "medium of exchange" aspect of currency, as the key to its success. But couldn't bitcoin still be insanely successful (in terms of its value) if it took off ONLY as a store of value? (And isn't that mostly how gold is used?)
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adamstgBit
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June 20, 2012, 12:06:26 AM
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Quote
Why aren't I filthy rich yet? It's been like two months.

fucking priceless

malaimult
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June 20, 2012, 12:12:40 AM
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you must be good at math.
you lost me after trillions  Roll Eyes

hear this theory of mine

rich people get richer. and you will find out why we aren't "filthy rich yet"  Wink

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June 20, 2012, 12:18:50 AM
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Why is Linux not used by everyone?

after all it is the superior product, and its FREE!

because my friend... because people are stupid.  Kiss


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June 20, 2012, 12:23:43 AM
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1) Why aren't I filthy rich yet?

Sadly, because the money lies in continually attempting to overestimate the stupidity of the general public, whereas Bitcoin underestimates it.

@electricwings   BM-GtyD5exuDJ2kvEbr41XchkC8x9hPxdFd
malaimult
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June 20, 2012, 12:26:07 AM
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Why is Linux not used by everyone?

after all it is the superior product, and its FREE!

because my friend... because people are stupid.  Kiss




neah... people are lazy

FreeMoney
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June 20, 2012, 12:31:12 AM
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Yeah, what the hell is going on? I bought some coins 2 years ago and those ones are only up 10000%. I was fully expecting 100000% by now.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
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June 20, 2012, 12:51:29 AM
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The demand for gold (and hence its price) is not driven entirely by its monetary usefulness because it has other uses such as jewelry and electronics.  But a non-trivial fraction of its price comes from its usefulness as money.  How big is that fraction? Let's be conservative and say it's only 25%.

I'd say that, at actual price of US$ 1600, 95% of the price is monetary usefulness. Remembering that copper has a better conductivity than gold.

You guys have really come up with somethin'
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June 20, 2012, 12:57:58 AM
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The demand for gold (and hence its price) is not driven entirely by its monetary usefulness because it has other uses such as jewelry and electronics.  But a non-trivial fraction of its price comes from its usefulness as money.  How big is that fraction? Let's be conservative and say it's only 25%.

I'd say that, at actual price of US$ 1600, 95% of the price is monetary usefulness. Remembering that copper has a better conductivity than gold.

what % of trade is done using gold anyway?

Roger_Murdock
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June 20, 2012, 01:00:42 AM
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The demand for gold (and hence its price) is not driven entirely by its monetary usefulness because it has other uses such as jewelry and electronics.  But a non-trivial fraction of its price comes from its usefulness as money.  How big is that fraction? Let's be conservative and say it's only 25%.

I'd say that, at actual price of US$ 1600, 95% of the price is monetary usefulness. Remembering that copper has a better conductivity than gold.

Yeah, that's kinda what I figured, but like I said, I wanted to be conservative.  I'm not one for making outlandish claims.  And if I'd suggested that each bitcoin should be worth $3.5 million instead of $950,000, some people might have dismissed my post as crazy.
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June 20, 2012, 01:04:48 AM
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Why is Linux not used by everyone?

after all it is the superior product, and its FREE!

because my friend... because people are stupid.  Kiss



A lot of people do. It is the kernel in their Android devices and therefore the dominant smart-phone operating system in sales. If you mean GNU/Linux as a desktop operating system then the figure is 1%. Now Bitcoin has a very long way to go in order to match GNU/Linux as a desktop operating system in market share.

1% of all gold 85 Billion USD
1% of world M1 money supply (cash / chequing accounts) 200 Billion USD http://news.goldseek.com/GoldSeek/1231778551.php

The combined valuation speculation / protection of value (gold) and medium of exchange (M1) for a 1% market share is 285 Billion USD or based on 21 million Bitcoin maximum 13,600 USD per BTC. So my insane pie in the sky valuation for Bitcoin is based on a market share equivalent to that of GNU/Linux on the desktop.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
ElectricMucus
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June 20, 2012, 01:08:39 AM
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The core group of bitcoin has decided to go for the long con. That's why.
Bitcoin will survive it though.
It's the birth, death and rebirth of an online community, happens every time.

I haven't received my bitcoin magazine yet.
Nuff Said.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
payb.tc
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June 20, 2012, 01:16:06 AM
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I haven't received my bitcoin magazine yet.

i left it on the coffee table for you, under your ellet.
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June 20, 2012, 01:27:28 AM
 #14

Just make a site called Bitconica, and go from there...

Oh, dont forget to leave doors open so you can be "hacked"


After, denounce bitcoin, and move on to greener pastures..

If its good enough for Bruce Wagner...    Roll Eyes

For Canadians by Canadians: Canada's Bitcoin Community - https://www.coinforum.ca/
adamstgBit
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June 20, 2012, 01:40:57 AM
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Why is Linux not used by everyone?

after all it is the superior product, and its FREE!

because my friend... because people are stupid.  Kiss



A lot of people do. It is the kernel in their Android devices and therefore the dominant smart-phone operating system in sales. If you mean GNU/Linux as a desktop operating system then the figure is 1%. Now Bitcoin has a very long way to go in order to match GNU/Linux as a desktop operating system in market share.

1% of all gold 85 Billion USD
1% of world M1 money supply (cash / chequing accounts) 200 Billion USD http://news.goldseek.com/GoldSeek/1231778551.php

The combined valuation speculation / protection of value (gold) and medium of exchange (M1) for a 1% market share is 285 Billion USD or based on 21 million Bitcoin maximum 13,600 USD per BTC. So my insane pie in the sky valuation for Bitcoin is based on a market share equivalent to that of GNU/Linux on the desktop.

i could see this happening

bitcoinBull
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June 20, 2012, 03:52:38 AM
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3) It seems like a lot of people are very focused on bitcoin's adoption by merchants, i.e. the "medium of exchange" aspect of currency, as the key to its success. But couldn't bitcoin still be insanely successful (in terms of its value) if it took off ONLY as a store of value? (And isn't that mostly how gold is used?)

I agree with you here. A lot of the gold bugs see conspiracies of manipulation and price suppression on the paper gold market. So they advocate taking possession of the physical gold to put pressure on the paper market. But with bitcoin its simple and cheap to take possession of the actual coins - just withdraw the bitcoins.

Also, the global economy is in a deflationary contraction phase of the cycle. Real estate falling, commodities, gold and silver prices dropping, stocks probably topped and trending down, etc. But bitcoin still holding up. If/when the shit hits the fan, or global credit starts expanding again, and inflation returns to global paper fiat, I could see bitcoin rising much faster (faster than gold even) in such an environment.

Of course, that depends on there being a strong bitcoin economy, a reliable network of trustworthy exchanges and financial services. Some thriving commercial services could only help (silk road is rumoured to have a revenue of some 400k+ btc stored at an address suspected to be for their coin-tumbler).

As long as we have such an ecology, the price/value will continue to flourish. Its been two months for you, but only six months since the price reversal from $2 after the bubble. You don't see the full consequences of a disruptive revolution overnight (Falkvinge predicts 10 years or 2019 for bitcoin, based on other disruptive technologies in his interview in the magazine). Give it two years, or more..

College of Bucking Bulls Knowledge
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June 20, 2012, 11:10:38 AM
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Heh, reading just the title, I was sure this was a humorous posting making fun of the speculation forum.

It seems op was serious Smiley

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Roger_Murdock
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June 20, 2012, 11:11:47 AM
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The combined valuation speculation / protection of value (gold) and medium of exchange (M1) for a 1% market share is 285 Billion USD or based on 21 million Bitcoin maximum 13,600 USD per BTC. So my insane pie in the sky valuation for Bitcoin is based on a market share equivalent to that of GNU/Linux on the desktop.

Ok, so we've heard from a bear. Are there any bulls who want to share their predictions? Wink
ripper234
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Ron Gross


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June 20, 2012, 11:16:34 AM
 #19

The combined valuation speculation / protection of value (gold) and medium of exchange (M1) for a 1% market share is 285 Billion USD or based on 21 million Bitcoin maximum 13,600 USD per BTC. So my insane pie in the sky valuation for Bitcoin is based on a market share equivalent to that of GNU/Linux on the desktop.

Ok, so we've heard from a bear. Are there any bulls who want to share their predictions? Wink

I'm a super bull, but give it a few months/years. Information takes time to spread.
I don't recommend investing money that you need for the next 2 years. Ideally 5 years.

I do think we'll see a huge rise soon, but I'm not betting anything on it ... just buy and hold, don't fudge.

Please do not pm me, use ron@bitcoin.org.il instead
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Roger_Murdock
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June 20, 2012, 11:35:49 AM
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Heh, reading just the title, I was sure this was a humorous posting making fun of the speculation forum.

It seems op was serious Smiley

Ha, yeah I was serious (mostly). The problem is I go back and forth. Bitcoin really DOES seem like it has the potential to be revolutionary and MASSIVELY successful. And I sometimes think I'm a genius for understanding its implications earlier than most.  But then I remember that I'm not that smart. And I haven't exactly won over the friends and family I've tried to convert. ("Dude, you've got to drop the bitcoin sh*t. Seriously, I don't care.") And then I wonder if I'm not just a moron who spent several grand on "Mario money" (my wife's preferred term) that will soon be worthless.   I guess we'll find out.  Smiley
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